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Technical Analysis – Charts of The Week

Trade Insights – EUR/USD – Chart shows viable long positions above the Major Pivot point at $116.20, targeting the key resistance at 117.50 and then after consolidation test of the resistance zone 118.80 to 119.00. Alternatively, dollar continues to strengthen, and prices drop below the Support Zone 115.30 then short positions targeting the next support level at 114.00.

EUR/USD

  • Resistance Zone: 118.80 to 119.00
  • Key Resistance Level: 117.50
  • Major Pivot Point: 118.40
  • Support Zone: 115.30 to 115.10
  • Last Analysis Date: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – EUR/USD – Chart shows viable long positions above the Major Pivot point at $116.20, targeting the key resistance at 117.50 and then after consolidation test of the resistance zone 118.80 to 119.00.

Alternatively, dollar continues to strengthen, and prices drop below the Support Zone 115.30 then short positions targeting the next support level at 114.00.

EUR/USD Daily Chart

Chart Analysis:

Directional bias: 2 Weeks EUR/USD

The Blue Vertical lines on the chart indicate our previous analysis dates on EUR/USD pair. The chart shows that the pair is in full bearish mode and down trend started in the month of May could continue further.  Prices are dropping since our last analysis on 9th September and seemingly have bottomed at the Support zone on the chart. However, it’s hard to say if there is going to be any breakouts in the absence of support and resistance reference zones around this level. But if any breakout must take place, then prices need to move above $116.00 level before the NFP news on Friday 8th October.  

Chart shows that the major Pivot is at $116.20. The buyers need to move prices above this crucial point for any stronger recovery. Once the prices are above the Pivot then Bulls can target the first major resistance level at 117.50 which is also the point where prices found resistance in September. A close above the key resistance could spark a reversal to test the Resistance Zone at $118.80 to $119.00.

As it appears on the chart, the pair is trading well below the 50-Day EMA and the 200-day EMA lines indicating there is a strong Bearish Bias of the Market. If prices continue to stay below the Major Pivot at $116.20 then the pair can drop below the major support level at 115.30. Once this key support is broken then prices can quickly drop to touch next support on the chart at 114.00 where EUR/USD might find strong demand.  

The pair is trading below RSI 30 level that indicates the pair is oversold or undervalued. It seems that the EUR/USD pair is already sitting at an inflection point and may experience a strong rally upwards from here.

Fundamental Overview: Tomorrow is NFP news day and if the data beats the expectations of the market, then the Dollar will continue to strengthen. The NFP report will need to be poor in terms of numbers for any taper reversal as the FOMC has indicated they will go ahead with the tapering.  

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Disclaimer

The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.

Vishal R

October 7, 2021

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